Corporate social responsibility - or CSR - is not an unusual concept abroad and it is something we are going to be hearing a lot more of in Ireland.
The idea is that businesses become more transparent and more responsive to their stakeholders: employees, customers, suppliers, the community and the environment. Battered by scandals such as Enron and WorldCom, businesses worldwide are attempting to rebuild consumer and investor trust and last week, 23 companies - including eircom, Diageo, Penneys, Aer Rianta, KPMG, Anglo Irish Bank, Eagle Star, Dublin Port Company and Green Isle Foods - signed a charter on corporate responsibility to show their commitment to responsible business practices.
According to Business in the Community Ireland (BITC), companies no longer see good environmental practice, social accountability and community involvement as business costs but "rather as investments in sustainable profits and central to managing risk and maintaining competitive edge".
"Irish companies have always been quite good in the community; responding to letters and requests, giving on an ad hoc basis," says Darina Eades of BITC. "We help them to integrate corporate responsibility (CR) into their business decisions, and focus their CR programmes to increase the benefit to the business. Many Irish companies are quite humble about what they are doing - we tell them it's important to have a positive impact but it's OK to get the credit too."
However, if CSR is used simply as a greenwashing PR stunt, it will do more harm than good, believes Paula Downey, a consultant specialising in cultural change in business. "Companies have to engage with complete honesty. If CSR is a figleaf, then instead of sustaining a transformation of your business, you won't be trusted." Eades believes that recipient community and environmental groups would be quick to spot a PR exercise: "There is no way companies are doing this from a PR point of view."
"CSR is a good start because it's putting responsibility on the agenda," says Downey. "But philanthropy is not the same as corporate responsibility. Corporate responsibility is about how you make your money, not about how you spend it."
Downey argues that CSR is about companies looking inside at their value systems and their culture and changing from within, rather than about looking outwards. "If a business wants to be socially and environmentally responsible, it needs to examine the social and environmental consequences of its actions with a view to reshaping its entire business strategy. In a world of depleted resources, there are sound business reasons for doing this. But we need a responsible financial community, which will allow people who run companies to make responsible decisions on environmental and social issues." When Bulmers Cider in the UK began its CSR assessment process, it realised that only 10 per cent of all the apples it sourced from growers were used for cider. "Therefore, 90 per cent of their product was waste. To be a sustainable business, they needed to get into waste management and change their entire business strategy," says Downey. Bulmers had an epiphany when a CSR expert told the company it was wasting 90 per cent of the product, he says. Now Bulmers is starting to look at itself as a waste-management company.
Another successful example of CSR is Rank Xerox, which made ... £1 million last year by taking back its old photocopiers and using the parts or the plastic to manufacture new machines.
Corporate responsibility, as defined by Downey - who has an ... M Sc in Responsibility and Business Practice from Bath University - is not some New Age anti-capitalism or anti-globalisation theory. "There's money to be made from doing the right thing," she says. "But CSR requires great leadership and real vision."
Business in the Community Ireland: www.bitc.ie, tel: 01-8747232. Downey Youell Associates: www.dya.ie, tel: 01-6612636
CSR initatives in Ireland